Recession in Guernsey? Not likely, says Treasury

Tuesday 2nd September 2008, 2:30PM BST.

A RECESSION in Guernsey is very unlikely, according to Treasury. But there are signs that the current level of inflation will impact on future public spending.

Treasury’s quarterly newsletter, released yesterday, said that inflation and slowing growth continued to dominate economic news.

And Guernsey’s RPI stands at 5.5%.

‘At present, the main question for the department is what impact the current levels of inflation will have on public expenditure,’ it said.

‘Until the public sector pay deals for 2008 are settled, it will be difficult for us to form a view on the likely impact on the States accounts for 2008 and on budgets for future years.’

It said that Guernsey’s economy remained robust, although there appeared to be a slowing of activity in the financial-services sector in the second quarter.